Homes in high-risk flood areas could be at risk
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New homes built on floodplains are now no longer guaranteed insurance cover, with the number of properties blacklisted by insurers set to double to one million.
The policy came into effect on the 1 January this year and states that insurers don’t have to renew insurance for new properties, leaving homeowners unable to switch mortgages and their property value affected.
The Association of British Insurance’s (ABI) “Statement of Principles” guarantees homes at high risk of flooding will still be covered until 2013 if the owner already has insurance and if the government invests in adequate flood defences.
The government plans to build three million new homes by 2020, but the ABI claims around a third of these are allocated for floodplains. Homeowners have also been warned that the cost of flood insurance is likely to rise after an Environment Agency prediction revealed a huge rise in the number of people at risk of flooding, based on the government’s Foresight Flooding report.
They predicted that the number of people at risk is likely to double from 1.5 million to 3.5 million by 2080, with the cost of damage soaring to £25 billion a year.
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